Should I feel guilty for raising prices?

Very simply, charge enough to be profitable, pay employees enough, buy equipment, subscribe to professional repair sites & take a vacation! Waiting for World Pac 2017 cruise.

Just remember, there will always be customers who think you over charge..... let them go.

I do.

Dave

My clients never know when I've raised my prices. I don't tell them!! I also do not post my hourly rate, because I charge more hourly if it is German, Swedish, PITA job, etc. I have been in my present location 12 years and have had only about 10 or 11 suspects ask me my hourly rate. Usually I have found that these folks do not fit my profile.

You guys are awesome and thank you so much for your input. Gives me confidence in charging what I charge now. Thanks!

I raised mine and nobody noticed. Well, the same guy that complained $7 to mount and balance a tire was too much still complains that $22 is too much. But he still pays me and comes back.

I simply learned to not care about the bottom feeders. I don't put in your parts, I don't let you use my tools to save money. I still charge a fair price for quality work, it's just more than it used to be.

The dealer closest to me charges $175 to read codes, then $175/HR to diagnose. Fixing is $150/HR. Whenever I think I'm too expensive I take a ride and see what it'll cost to bring my car somewhere for service.

The hourly rate is one thing, billing the time is something altogether different. We all need to eat. Most of my customers make more than me for doing much safer work, that's something I contemplate.

I use to worry that I was too expensive but after some training I quickly realized that I am not. Our labor rate is $110.73.

Number 1 reason people come to you is "TRUST". Price is number 6.

Jay... It's not about the price.

All guilt aside, I think its important to base your labor rate according to your costs, expenses and environment. It has to be fair to all parties and business makes its margins to survive. There are labor rate calculators out there to see what your labor rate should be calculating all of different factors about your business and market. There are also different labor rates for different jobs.

You may loose few customers but the one who believes and trust your work will never leave. Then you can build a better base of clients from there.

Good Luck!

Do not forget that you can only pay your techs 30% of labor loaded.

Do not forget that you can only pay your techs 30% of labor loaded.

You make it sound like a wage law. Obviously 30% is not a bad benchmark but it can definitely vary. I probably pay my techs closer to 40% loaded of my labor rate due to other factors such as tenure and experience. Before one of my three techs retired in May, the average tenure of my techs was 31 years. It's now 29 years with the remaining two. Is 40% too high? Maybe, but I haven;t had to hire a tech since 1994 and I can probably count on 1 hand how many days a year the three of them have called off sick in a year. When I hear stories from you guys about the problems finding techs I just smile.

You make it sound like a wage law. Obviously 30% is not a bad benchmark but it can definitely vary. I probably pay my techs closer to 40% loaded of my labor rate due to other factors such as tenure and experience. Before one of my three techs retired in May, the average tenure of my techs was 31 years. It's now 29 years with the remaining two. Is 40% too high? Maybe, but I haven;t had to hire a tech since 1994 and I can probably count on 1 hand how many days a year the three of them have called off sick in a year. When I hear stories from you guys about the problems finding techs I just smile.

This is very true and great point! If you can reduce expenses elsewhere to compensate then you can certainly pay your techs more. It is more of a rule of thumb however it is important understand the WHY. In this business, your payroll is probably the biggest cost and is rather constant. For this reason there is a lot of emphasis placed on paying an appropriate wage so that the employee makes a good living while the business also stays profitable.

Another good point is that techs are harder and harder to find these days. This is however a dangerous line because many owners get it into their head that they are almost held hostage to pay their guys more and more just to keep them when they may not being doing their business a service and also keep on guys that aren't worth the higher wage. Even though techs are harder to come by these days, it is still a big ocean out there!

Remember, people will always remember how they are treated. Not what you charged them!

I am actually pretty familiar with your area and I actually think $75/hr is still too low. Your area is near a corporate park and a high traffic area and I think even at a price higher than $75/hr you will do fine as long as there is a perceived value from your customers, new and old. A good customer will notice and appreciated the additional amenities from switching from side work to a fully functioning facility and thus be fine with the increased price. Also, at our shop, a majority of our customers don't even know our labor rate. We sell everything by the job not by the time or labor rate. We occasionally get the price shopper who calls and asks our labor rate and in a majority of those situation we always get a "wow" when we tell them we are $95+/hr but those aren't the type of customers we want anyway.

Just FYI in some states it is required to post the labor rate. It doesn't need to be lit up and blinking just in a prominent place like next to your license and tax id where the inspector can easily see it when he comes to check. Good customers don't care to look.

When you take your special someone out for dinner do you care how much everything on the menu costs? Is that the deciding factor on where to go or what to order? If your wife wants to order a side plate of olives to go with her salad do you care that for $10 you could have bought the whole jar? Of course not. My point is if the restaurant charged you $2 or $12 for ten cents worth of olives it makes no difference. $30? Sure that's probably too much. But if the waiter fails to bring them or presents them sloppily then any amount is too much.

If you are feeling guilty is because you don't know your true costs. List out your costs and then see if you feel the same charging your low rate, there is no more incentive to stop doing quality work than to realize you are losing money on your hard effort.

Once you know your true costs, see how fast the feeling of guilt goes away. And even faster once you pair it with a reticent customer that may think he is your best customer.